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Second grade teacher Shannon Kaple waves, with reminders to '#READ' and 'This Teacher Misses You' fixed to the side of her car, as she gets ready for a parade of teachers and staff from Tanglewood Elementary School, on March 25, 2020, in an event designed to keep spirits up during school closures due to the novel coronavirus pandemic.

The East Baton Rouge Parish school system is projecting it will close out the current fiscal year and start the new one in a stable financial position, but that’s likely to change as the economic damage from the novel coronavirus on the state and local economy becomes clearer.

The revised 2019-20 general operating budget, approved Thursday by the parish School Board, shows the school system spending about $460 million, almost exactly as much as it expects to receive in tax revenue.

The budget anticipates finishing the fiscal year, which ends June 30, with $26.5 million in unrestricted funds left over. That’s slightly more money in the bank than when the year began. The school system last avoided drawing on its reserves three years ago. During the 2018-19 year, the school system spent more than half of its reserves to stay in the black.

The school system’s bottom line this year was helped by a 4% increase in property tax revenue.

The current stability, however, may prove temporary. Sales tax collections are expected to drop thanks to the coronavirus shutdown, erasing some of the district’s fund balance, but it’s unclear how much.

The East Baton Rouge city-parish government is estimating a 7.3 percent decline in sales tax revenue than budgeted for the calendar year, which ends in December. For the parish school system, that level of decline would shrink revenue about $7 million over the next several months.

James Crochet, chief business operations officer for the school system, said he’s waiting on more information before settling on a forecast. One complicating factor is that sales tax collections, which normally come in quickly, are 45 days in arrears thanks to the city-parish extending the normal filing deadline by 30 days.

“It’s really hard to look at our collections right now,” Crochet said.

May is normally when the school system releases its budget for the following fiscal year. This year, that was scheduled to occur May 7, but the coronavirus has pushed that schedule back. Now, the proposed budget won’t be released until June 16 and is set for a School Board vote on July 16.

That budget won't be good for long.

School Board President Mike Gaudet said it likely will have to be revisited in August after schools return from summer break because things are changing so quickly.

“Right now the goalposts keep moving very rapidly,” he said.

Superintendent Warren Drake, who is set to retire June 30, said the 2020-21 budget is looking good at present, and like the current year’s budget, will be balanced. But he acknowledged it will be in flux through the year.

“There’s a lot of moving parts here,” Drake said.

The start of the school year will give school officials a better idea of the effect of the coronavirus on student enrollment, which stood at 41,200 students before schools closed. If enrollment drops, then state per-pupil funding will drop as well. Conversely, if enrollment increases, state funding will increase.

Drake said his staff is looking at ways to retain families as well as attract new families, particularly those who homeschool their children, with a better distance learning program.

The pandemic is helping finances in certain ways. The school system has been awarded $18 million over a two-year period via the federal CARES act, a $2.2 trillion federal rescue package prompted by the coronavirus. That is being tracked in a special budget that's not part of the general operating budget.

Also, since the pandemic is a disaster, the school system will eventually be reimbursed 75 percent of eligible expenses, courtesy of the Federal Emergency Management Agency. That as well is being tracked in a separate disaster fund. Crochet gave as examples sanitizing school buses, food for school meals that spoiled, as well as the need to print masses of instructional material for schoolchildren stuck at home.

There are savings this past year connected to the coronavirus, including $800,000 in lower fuel costs, $600,000 less for electricity and natural gas, and a $200,000 savings from not having to hire substitute teachers.

Drake said the school system has found ways to trim roughly $6 million in spending in recent months.

Other factors are increasing cost, including charter schools. During the 2019-20 school year, the school system directed $93 million to charter schools, about $2.8 million more than budgeted. The added spending is mostly heading to a handful of charter schools in Baton Rouge showing fast growth. More charter schools have agreements to open or expand in the future.

The school system also is reporting other recent expenses: $2.3 million more to Aramark for school repairs and maintenance; $1.5 million for required upgrades to several schools to comply with the federal Americans With Disabilities Act; almost $300,000 to rent school buses; and $200,000 for Trapeze bus routing software.

The school system is ending the year with 46 more employees than it anticipated. Some positions set to be cut this year were later reinstated, including assistant principals, school counselors, instructional coaches, bus drivers, as well as teacher and bus aides.


Email Charles Lussier at clussier@theadvocate.com.